Tuesday, 7 June 2022

Bills

State Taxation and Treasury Legislation Amendment Bill 2022

Second reading

Debate resumed on motion of Ms SYMES:

That the bill be now read a second time.

Ms WATT (Northern Metropolitan) (13:00): I rise today to speak on the State Taxation and Treasury Legislation Amendment Bill 2022. I am pleased and truly delighted that this bill builds on the Andrews Labor government’s record of implementing a progressive taxation system—across our term in government we have cut or abolished taxes or fees 57 times—but more than that, I am thrilled about a number of taxation changes contained in this bill that take steps to improve the lives of Victorians living with a disability.

One of those key measures is the introduction of exemptions for wheelchair-accessible commercial vehicles from motor vehicle duty. In line with the 2022–23 budget announcement, from 1 July 2022 an exemption from motor vehicle duty will apply to new or near-new wheelchair-accessible vehicles that will be registered as commercial passenger vehicles and meet the relevant requirements to provide unbooked services—that is, hail work or at a taxi rank. Currently an exemption from motor vehicle duty is available for a privately owned motor vehicle that has been or will be specially converted to provide wheelchair access to an owner or a family member, so this measure is an expansion of existing motor vehicle duty exemptions and concessions to help Victorians living with a disability, a handicap or an injury. It provides a new exemption for a vehicle that is covered for wheelchair access to be used to provide unbooked commercial passenger vehicle services. This new measure is directed at supporting more wheelchair-accessible taxis.

I know that for many it is not always easy getting around our state, and many constituents in the Northern Metropolitan Region have contacted me about this very issue right across the region. What I have heard plenty of times is that the wait time for wheelchair-accessible taxis continues to rise and it is getting harder and harder for Victorians with a disability to access these critical services. It is not cheap to keep a wheelchair-accessible taxi on the road. The inquiry into the multipurpose taxi program explored how, for many operators, it was unviable to keep a wheelchair-accessible taxi running. To keep the service running an operator needs to be able to cross-subsidise with something that is more profitable than normal taxi work. Many taxi operators simply cannot afford to keep running a wheelchair-accessible taxi, and in the end they take them off the road.

Through this bill the government is supporting the provision of wheelchair-accessible transport options and empowering wheelchair users to better access the transport method that best suits their needs and circumstances. The measure will save eligible wheelchair-accessible commercial passenger vehicles thousands of dollars in motor vehicle duty and help ensure better services are provided to wheelchair users, who make more than 1 million commercial passenger vehicle trips per year. An eligible commercial passenger vehicle owner that provides unbooked services will save $2772 in motor vehicle duty on the purchase of a $90 000 wheelchair-accessible commercial passenger vehicle, based on the 2021–22 rates. The above figure of $2772 represents the concessional duty that currently applies to an application to register a commercial passenger vehicle that has been specifically converted for wheelchair access. The full duty payable on a $90 000 vehicle is $4680.

In 2021, 975 wheelchair-accessible vehicles were registered with Commercial Passenger Vehicles Victoria and met the requirements to provide unbooked commercial passenger vehicle services. That comes from the 2020–21 annual report for Commercial Passenger Vehicles Victoria. It is our hope that, through measures like this, this number will grow and give people with a disability greater transport options. This measure expands and complements the current suite of motor vehicle duty exemptions and concessions for the transport of people with a disability, handicap or injury and builds on the Andrews Labor government’s body of work supporting Victorians with a disability.

There is an additional measure in this bill that builds on that work. This bill provides an exemption from land tax for land on which a specialist disability accommodation enrolled dwelling is being constructed. This construction-phase exemption will be available for a maximum of two years and will operate retrospectively from the 2020 land tax year onwards. A special disability accommodation, or SDA, enrolled dwelling has been specially designed to cater for the needs of people with sensory, intellectual, cognitive or physical impairment. An SDA resident is someone who is an NDIS participant residing in an NDIS-enrolled dwelling and who receives an SDA payment as part of their NDIS support plan.

Although a discrete exemption has been available since the 2020 land tax year for land that is occupied or available for occupation as an SDA-enrolled dwelling, this exemption did not extend to land in the construction phase. This is out of step with the treatment of other specialist accommodation types, including supported residential services, which are eligible for an exemption for up to two tax years whilst the accommodation facility is being constructed on the land or in the construction phase. The construction phase exemption for SDA-enrolled dwellings will operate retrospectively from the 2020 land tax year onwards to align with the discrete exemption for land that is occupied or available for occupation as an SDA-enrolled dwelling. Retrospectivity will not have an adverse impact on landowners as the exemption is beneficial in nature. Taxpayers who are eligible for this exemption and have paid tax for any of the 2020 and 2021 tax years will be entitled to claim a tax refund. By aligning with the timing of the introduction from the 2020 tax year of the discrete exemption for land that is occupied or available for occupation as an SDA-enrolled dwelling, retrospective operation of the exemption will ensure consistent treatment with other specialist accommodation types which are eligible for an exemption for up to two tax years whilst land is in the construction phase.

A similar measure operates in Queensland, but the remaining jurisdictions do not have specific or equivalent land tax exemptions for an SDA-enrolled dwelling whether under construction or otherwise. It is certainly good to hear that Victoria is moving ahead. This builds on the previous initiative on motor vehicle duty to ensure the tax system works in a way that supports Victorians living with a disability. These are important, meaningful steps to make some improvements for those living with a disability by pulling some of the levers available through our taxation system.

This bill also creates a windfall gains tax exemption for our state’s universities. As was announced in the 2021–22 Victorian budget, the government is introducing a windfall gains tax on rezoning decisions that create a land value uplift of more than $100 000. The windfall gains tax to come into effect on 1 July 2023 will ensure that the community receives a fair share of the value generated from government rezoning decisions. This is an important integrity measure that takes the sugar off the table and ensures proceeds are returned to the community and we avoid situations like we saw at Fishermans Bend when the Leader of the Opposition was the Minister for Planning; we certainly do not want a repeat of that.

Since the introduction of the windfall gains tax the government, led by the Parliamentary Secretary to the Treasurer, has consulted widely with industry ahead of its commencement. As part of this process the government has agreed to an up-front exemption for the windfall gains tax on land owned by an Australian university in certain circumstances. In order for an exemption to apply the university must satisfy the commissioner of state revenue that any revenue derived from the rezoned land will be used to further the university’s charitable purposes—that is, by reinvesting the proceeds into their educational offerings—and I think that makes perfect sense.

There are a number of other changes contained in this bill. The bill replaces the current refund model for recently constructed or renovated principal places of residence—or PPRs as they are known—with an up-front exemption from land tax, including a clawback mechanism if the exemption’s requirements are not fully met. The current refund model requires land tax to be paid up-front during the construction or renovation phase and it can only be refunded after landowners have moved into the finished residence. The new exemption does not require the land tax to be paid up-front and will reduce the financial burden and red tape for landowners. It will also be consistent with the rest of the PPR exemption provisions, which provide an up-front exemption rather than a refund. The amendment will take effect from 1 July 2022. This means that if construction or renovation of a PPR is completed on or after 1 July 2022, the landowner may apply for an up-front exemption for the 2023 tax year onwards.

There is so much more in this bill, including confirmation that an exemption from payroll tax applies to certain wages paid under employment agency and other related arrangements. The amendment is intended to confirm the longstanding policy position in Victoria that an exemption from payroll tax is available for wages paid to service providers by an employment agent where the agent supplies their common-law employees to a client who is exempt from payroll tax. An example of that might be a charity or public hospital. A recent decision in Queensland, in their Court of Appeal, held that the equivalent payroll tax provisions in Queensland did not apply to common-law employees, casting doubt over the application of the exemption to common-law employees in Victoria as opposed to independent contractors. This initiative seeks to strengthen Victoria’s existing law and bring it into line with our northern neighbours in New South Wales, who have a similar exemption in the provision of wages paid to service providers that are common-law employees of an employment agent.

The bill clarifies the time at which a deemed assessment of a dutiable transaction is made and served when the transaction is processed using the online duty payment system. The amendment clarifies the point in time at which a deemed assessment is taken to have been made and served if the person uses the online duty payment system—that is, the latter of the making of an irrevocable commitment to pay duty or to not pay duty, as the case requires, or the completion of the dutiable transaction. Now, there is a tongue twister. The amendment also confirms that an estimate of duty provided by an online duty payment system is not an assessment of tax, delivering further certainty to users and ensuring that revenue laws evolve to reflect the current operational environment.

Furthermore, the bill amends the Taxation Administration Act 1997 to permit the disclosure of protected information to certain specific commonwealth enforcement bodies and to enable further commonwealth enforcement bodies to be prescribed by regulation. These bodies include the Australian Financial Security Authority; the Australian Transaction Reports and Analysis Centre, known as AUSTRAC; and member bodies of the Phoenix Taskforce where the disclosure is in connection with their law enforcement or public revenue protection activities. This change seeks to authorise a secondary disclosure of protected information with the consent of the person to whom the information relates. Currently if a person receives protected information from a tax officer under a permitted disclosure, they are prohibited from making a secondary disclosure—or a non-disclosure, as it is also known—on that information to another party. The amendment only authorises secondary disclosure in one new situation: where the person to whom the information relates gives consent to a secondary disclosure by the recipient of the information from a tax officer. This amendment seeks to place a five-year limit on the ability for a taxpayer to lodge an objection out of time.

In this bill there are a number of important taxation reforms that build on the Andrews Labor government’s record of implementing a progressive taxation system. Let us not forget that our government has cut or abolished taxes 57 times since coming to government. This includes increasing the payroll tax free threshold twice since coming to government so that fewer small to medium-sized businesses pay any payroll tax. Last July we cut the regional payroll tax rate to 1.2125 per cent—just one-quarter of the metropolitan rate and the lowest in the nation. It is interventions like these that have seen the regional unemployment rate fall to 3.2 per cent—the lowest in the nation and less than half of what it was when those opposite were voted out of office. So we have supported businesses through the worst of the pandemic with payroll tax cuts that have saved Victorian businesses about $1.7 billion up to 2021–22 and will save them about $4 billion over the forward estimates.

In addition—it bears repeating—this bill contains two very important measures that will support Victorians living with a disability. The introduction of exemptions for wheelchair-accessible commercial vehicles from motor vehicle duty will increase the number of wheelchair-accessible taxis on the road. This will make it easier to access these taxis and increase the accessible transport options in our state. Further to that, we are providing an exemption from land tax for land on which a specialist disability accommodation enrolled dwelling is being constructed. That is really something to be proud of, and I hope that for people with a disability in our state that are looking to travel around and live their lives the changes in this bill before us today bring them some comfort in continuing to live an enriched and valued life here in our state.

Mr DAVIS (Southern Metropolitan—Leader of the Opposition) (13:14): I am pleased to rise and make a contribution to this State Taxation and Treasury Legislation Amendment Bill 2022. This bill stands in very stark contrast to recent state taxation bills over previous years. Each of those years has seen a huge surge in taxation, with a raft of new taxation measures introduced. This bill, by contrast—and the context is important here—cleans up the results of mistakes in previous years in a number of areas and indeed makes a number of modest changes. I will quickly cover some of those areas. The bill amends the Borrowing and Investment Powers Act 1987 and makes amendments to provide new regulation-making powers. This may impact on local government. We are cautious about what appears to be a modest change actually erecting a further barrier for local government, but that is not something we will oppose.

We support the removal of duty on wheelchair-accessible taxis. We support the land tax changes as sensible steps. We note that the payroll tax changes are modest, and we note that the clean-up act on the windfall gains tax is, I think, a first step in cleaning up a lot of problems with that windfall gains tax bill—a bill that we opposed strongly, a bill that imposed a big new tax on housing and a bill that is going to have a huge effect on housing affordability. We are conscious, let us be clear, of the issues here. The decision to exempt universities from some of the windfall gains tax provisions is not opposed by the opposition, but we note this is a first recognition by government of unintended effects of the nasty windfall gains tax that was passed a year ago.

We do have significant quibbles with a small clause in this, clause 34, which relates to objections lodged out of time. In itself it is a very modest change, but we think it will have a particularly harsh impact on a small number of taxpayers, and I want to put on record my concerns here. I thank the government for the information it has provided there. It relates, as we say, to a modest number—0.5 per cent—of objections received by the State Revenue Office. There were seven of these in 2017–‍18, 15 in 2018–19, 11 in 2019–20, 13 in 2020–21 and seven in the financial year 2021–22 that we are in. So we are talking about a very small number of people, often where particular circumstances apply and the State Revenue Office, the chief officer, has had capacity to allow objections at a later period beyond five years. These again are a very small number of objectors where discretion has been exercised by the SRO, which is not known for its love. There is not the milk of human kindness at the SRO, to be honest. You have got the SRO commissioner providing this latitude to a small number of taxpayers, and we think that it is harsh and cruel that the government is going to close down that opportunity for the SRO to exercise discretion.

It is important in this bill to get the context of where we are: the huge surge in taxation that has occurred under this government and the fact of the context in which these minor changes that are in this bill—relatively minor changes—are placed. I mean, this is the eighth budget of Daniel Andrews as Premier, and the current Treasurer. This will be Labor having been in power, by election day, for 19 of 23 years. It is a budget, a tax bill, that points to Labor’s tax and deceit and debt, and it is the highest spending budget in the state’s history. These tax revenues are part of that, and the previous raft of new taxes—42 new taxes brought in and a number sitting in the wings waiting to come forward, particularly the big new tax on housing that Labor proposed to put on every subdivision over three in the state. That would hit a metropolitan house at median price with about $20 000 in extra tax, a huge hit for young families. In the country it is about $12 000. Make no mistake, the government has that tax sitting in the wings. If it is re-elected, the tax will be brought back. It is hard to think of a worse government for tax in the state’s history, but a Labor-Greens government could be elected depending on what happens in November. We will be seeking to be elected, but a Labor-Greens government would be beholden to the Greens plans on the big new housing tax, which would see a doubling of the collections. It would see a $40 000 hit on homes to collect more revenue for the projects that the Greens have outlined. They say that the government’s proposal for the tax on new housing should be doubled—it should be $40 000. That would be a huge hit on young families seeking to buy a new home.

As I said, this is the highest spending, highest taxing and biggest debt government in Victoria’s history. Tax collections, it is important to note, have increased by 80 per cent, from $16.9 billion in 2013–14 to a forecast $30.5 billion in 2022–23. Land tax has gone up from $1.7 billion in 2013–14 to a forecast $4.8 billion in 2022–23—a 192 per cent increase in land tax, having risen from 10 per cent to 17 per cent of total state tax revenue. And land transfer duty, stamp duty, has increased from $4.2 billion in 2013–14 to this year—2021–22—$10.194 billion. That surely is a peak, and it is forecast to be $8.2 billion in 2022–23—a 97.4 per cent increase, more if you take the $10 billion figure of the current year. Payroll tax has increased from $4.95 billion in 2013–14 to a forecast $6.8 billion in 2022–23.

But it is important to compare this to what has actually happened to the economy. The gross state product is up from $399 billion in 2013–14 to an estimated $494 billion in 2021–22—a 23.7 per cent increase. So the increase in the GSP is far smaller than the huge surge in state taxation, and that is a burden on the Victorian economy, it is a burden on families and it feeds through directly into their cost of living. That is a huge, huge difference.

People will remember 2014 and they will remember the Premier looking down the barrel of the Channel 7 camera on the night before the 2014 election. He was asked about taxation, and he said he would not introduce new taxes. That is what Premier Andrews, then Leader of the Opposition, said:

I make that promise, Peter, to every single Victorian.

But now, since then, Labor has introduced more than 40 new taxes and, as I said, there are some waiting in the wings.

Why are these taxes needed? It is such a huge cost. Well, we know that there has been a huge surge in waste and mismanagement. We saw at the Public Accounts and Estimates Committee the other day the Minister for Transport Infrastructure refuse to rule out that the blowouts on projects were more than $28 billion. She would not provide an alternate overall figure—she refused to do that—but would not rule out that there is much greater than $28 billion in cost blowouts. This is waste on projects, over and above the amount.

Ms Taylor interjected.

Mr DAVIS: Ms Taylor, it may be inconvenient for you, but actually the revenue that comes in through the state taxation bill is a very important context here. As I have outlined, state taxes have increased across the period of this government, and this bill amends some of the mistakes that were made by this government in the previous years. For example, with the windfall gains tax, which is such a huge hit on housing affordability, they have had to make amendments in this budget to correct the problem in the previous budget by removing university projects from the windfall gains tax. We do not oppose that, but we recognise that that is just the first of a series of blunders that have been made in the windfall gains tax process.

There is waste and mismanagement—more than $28 billion of project waste and blunders and cost blowouts—and this is a government that cannot control its costs. It cannot keep its costs under control. We see that wherever we look. There is increased debt, and I will have more to say about that later in the week. But the debt will get to $167.5 billion by 2025–26. That is what is put in the budget this time. We think that that is conservative, and we know that Moody’s and Standard & Poor’s are very worried about the Victorian economy. They have singled out the Victorian budgetary position as distinct from those of the other states. Moody’s has stated that Victoria is at risk of a credit downgrade, potentially forcing up the debt servicing costs as a share of state revenue. This is a very serious point. The huge revenue increase has been squandered on increased numbers of very senior executives in the state public service, a more than 100 per cent increase across the period of this government. We have seen the huge waste and mismanagement across the period of this government, the huge cost blowouts. So huge tax taken in, but a failure to use it well.

As I say, the ratings agencies have been very clear about the position of Victoria, noting that Moody’s said:

Despite the underlying strength of the Victorian and broader Australian economy, we expect Victoria’s debt burden will not stabilise before the end of fiscal 2027, further increasing … pressure on the state’s rating.

Standard & Poor’s global ratings agency analyst Rebecca Hrvatin warned of ongoing concerns about Victoria’s finances. She said that, while the budget marked a strong recovery post COVID, after-capital account deficits and rising debt levels remained key downside risks. She said:

The state’s debt levels are likely to soar past 200 per cent of operating revenues by fiscal 2024 due to historically high infrastructure spending, exacerbated by … inflationary pressures and some project-related cost overruns.

I think that is the understatement of the year.

The ratings agencies are an interesting group. They look at all sorts of firms and jurisdictions closely and provide independent advice. It is interesting to hear what Tim Pallas said back in 2018. Off the back of the work that had been done in that period from 2010 to 2014, he crowed about Victoria being one of only two states with a prized AAA stable credit outlook from both Moody’s and Standard & Poor’s. He basked in the ‘independent and international affirmation’ of Standard & Poor’s—those were his words. It is a different story now. He is at loggerheads with the agencies. He is becoming very dismissive of the ratings agencies and their successive downgrades. But of course they are downgrading Victoria because of the state government’s mismanagement. The spending has not been controlled, the cost blowouts have not been controlled and the increases in tax have crimped the economy. The huge tax increases have pushed up the cost of living. As I have said, the 80 per cent increase in state tax take over the period of this government is a huge clobber on average, everyday Victorians and Victorian businesses. It makes us less competitive with other jurisdictions both in Australia and elsewhere.

We have said very clearly on a number of these state taxation matters that we will not bring in Labor’s big new housing tax. We are fully opposed to Labor’s big new housing tax. But the community should know that if Labor is re-elected they will get it, and if it is re-elected in partnership with the Greens they will get a double clobber. The Greens want to double the big new housing tax. That is the context we are facing with these tax bills that come to the chamber at the moment. We are in the context of massive tax increases and the uncompetitiveness of the Victorian economy.

We have said on that big new housing tax that we would introduce the planning reforms that the government sought to shackle with them. They are on the shelf. They are waiting to be done. We have said we would take them off the shelf and we have said that we will implement these reforms where Labor failed. We will, within three months of coming to office, after consultation with local government and while retaining more local control and protections over planning decisions, largely implement the proposed reforms. The reforms are the result of several years of expert evidence, advice and solutions provided to the government by the commissioner for better regulation, by the Urban Development Institute of Australia, by the Property Council of Australia and by others.

Sitting suspended 1.30 pm until 2.02 pm.

Mr DAVIS: As I resume, I make the point again of the context of this state taxation bill: the huge increase of 80 per cent in Labor taxation since 2013–14, the modest increase in the size of our GSP, the challenges that we face and the plans of the state government to increase new taxes. There is no question that if they are elected they will put in the big new housing tax, which will add $20 000 to a median house in metropolitan Melbourne and $12 000 in country Victoria. We know if they are in coalition with the Greens that the Greens want double that tax on housing. They want a $40 000 hit on a median Melbourne house price, and that is what the Greens have announced is their policy.

I think it is important in that context to see the challenges that the state faces. The context of the new taxes that Labor have introduced over the period of eight years of government, the more than 40 new taxes and the massive increases I outlined in stamp duty, land tax and payroll tax—the major taxes, but also the raft of new taxes introduced—is an important context. Daniel Andrews has said to get out of the mire that the state is currently in we need to grow the state, and of course we need to grow the state. But it is very hard to grow the state when you have had falls in GSP. Victoria’s position has been worse than other states, with the 263 days of lockdowns, much more than other states and the longest in the world. Victoria is the only state to have a significant fall in GSP.

Victoria is the only state to see a massive fall in its population—44 700 over a year statewide and a fall in Melbourne’s population of more than 60 000 in one year. That is a huge drift of population—a fleeing of population—from the state. Obviously that has got different components. It has got a natural component in it, it has got overseas migration and it has obviously got net interstate migration. And if you want to see a clear figure that is a marker to the state’s position, the fall in the position of net interstate migration is the clearest one of the lot. You have to go back to 1997 to see a net outflow of people for the 30 years before that. After that it turned around and we had significant growth in population by movement from other states and territories. But this year we had a fall, and people more often left Victoria than came to Victoria from other states and territories. So it is very hard to see how the Premier plans growth when he has had a record of falling population and people fleeing the state. Obviously tax is not the way to make people come to the state; a raft of new taxes is not the way to do that. You cannot tax your way to prosperity. Victoria has become increasingly unattractive to inbound investors, and many who would have previously moved here will not. That is that clear marker that I have laid out and the clear position.

We have obviously said there needs to be a focus on recovering and rebuilding, and our commitment is to no new taxes. This state taxation bill, as I have outlined, is actually a modest bill in itself, but in the context of recent years of massive tax hikes and massive tax-take increases—an 80 per cent state tax increase across the period of this government—it is a huge hit on the living standards of Victorians and a huge hit that feeds directly through to the cost of living for everyday Victorians. I could use many, many examples. The land tax that is applied to powerlines on state land is fed directly through into the price of electricity. So we have seen in recent months an increase in electricity charges with a straight flow-through from the increased land tax that the state government has clobbered the electricity providers with. The state government are desperate for revenue—they will grab it anywhere they can—but that is a straight feed-through, a straight cost, that goes and touches everyday Victorian households and everyday Victorian businesses.

It is true that the growth also has to centre around productivity, and the productivity record in Victoria is shocking. We have seen productivity drift over the last eight years. In the period from 1995–96 to 1999–2000 productivity rose by 3.66 per cent. Between 2000–01 and 2009–10 labour productivity stalled at a third of that rate, 1.66 per cent, and over the period 2010–11 to 2019–20 labour productivity slipped even further to 0.9 per cent. You cannot actually get ahead if you have got declining productivity or static productivity, and that is a very bad outcome for Victoria. The latest ABS per capita data shows Victoria’s flat economic performance. GSP in June 2014 was $68 457 per person. Seven years later, GSP in June 2021 was $70 292—a measly increase of $1835 per person. This compares to the increase in GSP under the Kennett Liberal government of $13 491 between 1992 and 1999. Relative to other states, Victoria’s GSP per capita at $70 292 is the third-lowest of all states and territories, well behind New South Wales at $77 532 and well behind the national average of $78 245. For Victoria’s economy to improve it has got to get its GSP up and its GSP per capita.

It is important, I think, in this context to look at the impacts of state government regulations and controls that have often been counterproductive. The Victorian Chamber of Commerce and Industry (VCCI) had its cost and ease of doing business task force, and I pay tribute to the work that that task force has done. They produced a critical paper laying out the productivity problem in Victoria, and they said:

Victoria has a productivity challenge that started well before the pandemic.

Note this: ‘well before the pandemic’. Labor likes to point at the pandemic; no, no, no—the debt was already up. We were already in deficit on 31 December 2019. The state was in deficit, the big project blowouts were locked and loaded and they were careering out of control. We already had the problems with the metro, we had the problems with the West Gate Tunnel—and I could go on. At that time it was very clear that Melbourne and Victoria were heading in the wrong direction.

The Committee for Melbourne, in its recent international benchmarking study, recognised the same problem, saying:

GDP per capita in Melbourne is now 20% below its peer group average, while household disposable income has also fallen relative to others.

That is an international benchmarking exercise by the Committee for Melbourne, and it is an important benchmarking exercise. I do not deny that Australia more generally has a productivity problem, but Victoria’s performance is not excused by that, and it is actually, as I have already outlined, a laggard performer in national productivity performance. Income per head has hardly moved. It is no wonder that Victorian families are actually worried about the cost of living, with rising prices and stagnant income under Daniel Andrews. They have every right to be angry. That is the achievement of Labor in Victoria.

The VCCI survey—and I again pay tribute to the detailed work that was done by VCCI—said:

Doing business in Victoria is harder than it needs to be—not just financially, but in terms of time demands and stress. Nearly 40 per cent of Victorian businesses say time is a bigger cost to doing business than money. This shows that some aspects of government regulations and approach to regulation are cumbersome and poorly administered. Pressures on business owners are particularly acute in parts of regional Victoria. Importantly, the most significant costs faced by Victorian businesses were present well before March 2020 and are likely to persist well beyond the COVID-19 recovery.

I make the point that the way to have greater tax revenue is to grow the economy. You have got to grow the economy. We do need some targeted population support to businesses in particular areas of high technical need and others, but we also do need to focus on actually lifting the productivity of the state rather than simply taxing our way out of these problems, because taxing is not the way to deal with these challenges that the state faces.

I think Victoria does need to go forward with this way, and that is why we have outlined a Victorian productivity commission. We actually think that Victoria is remiss in not having a body of this nature—a body that is equivalent to the one in New South Wales or the national body or South Australia’s. The challenge is there for us to look at ways of growing the pie, growing the outcome for the whole community and doing that in a collaborative and thoughtful way, and a productivity commission in Victoria can be part of achieving that. Early reports of the productivity commission could begin to look at a number of really significant ways forward.

I want to return to some of the sharp tax points that we have made. Concurrently with this budget, on 2 May, the state government virtually doubled the charges on building firms, builders and building surveyors, and indeed there are a raft of others to be regulated and registered over the next period. We say that huge increase is unjustified. It is another new tax directly on builders. It is another new tax on the building and construction industry, and those taxes are obviously passed through to consumers in the end, pushing up housing prices and making houses much less affordable. The state government has done this by regulation. It is not something that we can easily stop, but we have certainly called for a return to the previous levels of charge. It is clear that that would be a significant help. Of course it is the wrong time to be putting additional charges on building and construction. I think the state government has not thought through what is happening in the sector at the moment with the increases in prices of steel, wood and other inputs as well as the labour shortages that are significant points as well. So it is the wrong time to put on new, harsh regulations and new charges.

We have heard what VCCI has said about the challenge of regulation in the state. We need to be smarter in the way we do this. We cannot simply jack up tax. As I said, in the context of this bill, which is in itself a modest bill—and many of the measures in it, as I have indicated, are supported by the opposition—tax has been jacked up over the last eight years across a wide front, with huge increases in stamp duty, huge increases in land tax, huge increases in payroll tax and more than 40 new and expanded taxes put in place in direct breach of Daniel Andrews’s promise in 2014 and indeed the Treasurer’s promise. The Treasurer made a similar promise in 2014, which he too has breached, and that set of facts is an important set of facts. People need to understand the context of the state government’s taxing policy. They need to understand the impact that it is having on the state’s economy and the impact that it is having on the state’s competitiveness.

So, yes, we need to grow the state. Absolutely we can grow it with targeted population growth. We need to turn around the population that has been fleeing the state—that is what has been actually happening over the last 18 months under this government. Unlike other states, Victoria’s population has fled in big numbers. As I said before, 44 700 statewide was the fall to 30 June last year, and the fall in Melbourne’s population was 60 500. These are significant markers to the failures by the state government—the failure in Victoria—and that stands in stark contrast to every other state and territory in the nation. You cannot expect an economy to grow, you cannot expect an economy to come out and get to a durable position where it can actually provide in the way it should for families and businesses, if you have got these very high taxes and very heavy regulations. That is why we need to think more carefully about the way we do these things. That is why we need to focus on lifting productivity in a collaborative way. That is why we need to focus on ensuring that the population that is fleeing the state is turned around, and that is why we need to focus on maintaining a low-tax state, a state that does not stand out for all the wrong reasons.

Mr BARTON (Eastern Metropolitan) (14:17): I rise to speak on the State Taxation and Treasury Legislation Amendment Bill 2022. This bill makes a number of administrative changes to taxation laws, but what I would like to discuss is the motor vehicle exemption for wheelchair-accessible commercial passenger vehicles. This will save operators nearly $3000 off their next vehicle. This is a win for essential wheelchair-access taxi vehicles in Victoria. Our wheelchair-access taxis are the backbone of local communities and are relied upon by thousands of Victorians with a disability. Putting wheelchair-accessible taxis on the road is expensive and in many cases financially unviable. We also know this because taxi drivers and operators throughout Victoria have been begging for assistance to keep this essential service on the road. Those in the industry have long relied on cross-subsidisation. What this means is that a wheelchair-accessible taxi service can only be provided by an operator if they are subsidised by somewhat more profitable work than normal taxi sedan work.

Extending the multipurpose taxi program to 80 000 Uber drivers has significantly reduced business for taxi operators and reduced the safety for the travelling public. For the past year and a half I have had the industry telling me just how much harder it is to keep wheelchair-accessible vehicles on the road, with operators already removing their vehicles because they cannot continue running at a loss. This exemption acknowledges the importance of our wheelchair-accessible taxis and their essential role in our community. I hope that this small change can help alleviate some of the financial burden experienced by these operators. There are a couple of requirements for this exemption. The vehicles must meet the requirements to provide unbooked work and must be less than two years old. The exemption will be introduced from 1 July this year.

Changes like these make a difference to our industry, and I continue to fight on many fronts for a sustainable pathway forward. I am still fighting for further transition payments for licence-holders, an increase in taxi fares and regulations that will ensure a true level playing field within our industry. You may not be hearing about this every day, but I can assure you not a day goes by when I am not taking these issues to the government. I commend this bill to the house.

Mr RICH-PHILLIPS (South Eastern Metropolitan) (14:20): I am pleased to make some remarks this afternoon on the State Taxation and Treasury Legislation Amendment Bill 2022. This taxation amendment bill is unusual in its relative brevity and the few matters that it addresses. As members of the house know, following the introduction of the budget the appropriation bills are usually accompanied by a state taxation amendment bill which implements or gives effect to the government’s revenue changes. We have seen over the course of the last eight years that where a state taxation amendment bill has come in following a budget it has generally been to increase the tax burden on Victorians. We have seen that over the course of the last eight years time and time again. Despite the commitment that Mr Davis referred to earlier that the Premier made prior to the 2014 election, we have seen time and time again an increase in the tax impost on the Victorian community.

This taxation amendment bill is slightly different in that for once we are not seeing a large increase in the tax impost. The taxation amendment bill is largely administrative in the sense of the amendments it makes to the suite of current taxation legislation. Some of those changes are worthwhile. Mr Barton spoke about the change to the Duties Act 2000 with respect to duty on wheelchair-accessible vehicles. Other speakers have talked about changing the model for land tax where properties are being constructed to make it an up-front model rather than a model where someone needs to seek a refund after the fact. Those are worthwhile amendments to our taxation legislation.

But what is absent in this bill and what is absent from the government’s overall approach is any commitment to tax reform. We have seen over the life of the government the tax burden as a proportion of gross state product (GSP) in this state increase. When this government came to office in 2014, state taxation as a proportion of gross state product was just on 4.8 per cent. That burden is now up to nearly 5.6 per cent, so we have seen an increase in proportionate terms in the state’s tax take as a share of the state’s economy. We are no longer in a situation where Victoria’s taxes are the most competitive in Australia. We are now trailing the pack on tax competitiveness. It is more expensive in a tax sense to do business in Victoria than it is in other states. What we do not see from the government is any plan to change that, any plan to reform the tax base in this state, any plan to make taxation administration simpler in this state. We have seen the tax burden rise by about 15 per cent in real terms over the life of the government and no plan to change that, no plan to restore Victoria’s tax competitiveness.

In preparing for this bill I went back and had a look at the way in which taxation legislation has changed over the life of this government. We hear from the government, we hear from the Minister for Government Services, the Minister for Regulatory Reform, who is also the Assistant Treasurer, about the government’s commitment to reducing the burden of red tape, about the government’s commitment to making it easier for people to do business in this state. But we have not seen that in the field of taxation administration. Over the life of this government, taxation legislation in Victoria has increased by 240 pages—from roughly 970 pages of legislation when the government came to office to now more than 1200 pages of taxation legislation.

To give an example, the Duties Act has increased from 416 pages to now more than 506 pages, and it has been amended 25 times in the life of this government. We have seen the Land Tax Act 2005 increase from 160 pages to now more than 260 pages, with 21 amendments over the life of this government. The Payroll Tax Act 2007 has increased by more than 30 pages, and the Taxation Administration Act 1997, which sits over the top of them all, has increased from 129 pages to 149 pages, with 23 amendments over the life of the government. So we have not seen the regulatory burden reduce for businesses in terms of taxation administration, we have seen it grow substantially. Our taxation legislation is more complex. It is changing regularly. As I said, in some instances 25 times has the legislation changed over the life of this government. So it is not making it easier for businesses to operate in this state. It is not making it easier for businesses to understand their taxation obligations in this state. The legislation is becoming longer, it is becoming more complex and it is becoming harder for business to use.

When you look at the way in which taxation has changed over the life of this government and the new taxes which have been introduced—and Mr Davis has spoken about that—you really do wonder about the motivating factor driving the government. Yes, all governments want additional revenue. All governments are of the view that they can spend taxpayers money better than taxpayers can. But the way in which we have seen the taxation burden increase and the breadth of the taxation burden increase has been interesting. There are now a number of taxes on the state books, and it is worth referring to table, I think it is, 4.2 in the budget papers, which sets out the full list of tax measures in the state, to understand how many different tax measures there are but also in some instances how insignificant they are to the tax base.

To give an example, the newly introduced windfall gains tax, which is to apply in the next year and then increase in the out years, is forecast in 2025–26 to generate revenue of $81 million. That is less than one-quarter of 1 per cent of the state’s total tax revenue. The metropolitan planning levy is forecast to generate 0.06 per cent of the state’s total tax revenue in the 2025–26 year. These are minuscule contributions to the total tax base of the state, yet their impact on the areas of the economy they hit—being development and being the creation of residential property, and we obviously have a huge number of issues with housing in this state, with the development of new housing and with housing affordability—is immense. The tax measures hit the housing sector substantially, but they make minimal contribution to the state’s tax base. They add enormous administrative burden and they add substantial cost to housing, but they make minimal contribution to the tax revenue of this state. The metropolitan improvement levy is another one, with 0.64 per cent of the total state tax base; I referred to the congestion levy, 0.31 per cent of the state’s tax base; et cetera. So we have got a number of small taxes which make minimal contribution to the tax base, which are administratively burdensome on the sectors they hit—and again it is particularly in the housing sector where they have a disproportionate disincentive effect—yet provide minimal revenue to the state.

At the other end of the scale we have the taxes which make the largest contribution to the state’s revenue base: the largest single tax in the tax base, stamp duty—land transfer duty—accounts for roughly 25 per cent in the 2025–26 forecast; payroll tax, just over 23.5 per cent; and land tax, around 17 per cent of the tax base. So we rely on three large taxes for the vast majority of the state’s tax revenue, and as a consequence the tax burden is spread very narrowly. The people who pay land transfer duty, stamp duty, are the people who purchase property in any given year, which is a small proportion of the total Victorian population. The people who pay payroll tax in any given year are obviously employers—again, a small proportion of the population. And the people who pay land tax is a less clearly defined proportion, because the State Revenue Office is pretty limited in the statistics it publishes around the number of taxpayers in each category, but it can be assumed to be a relatively small proportion of Victoria’s total population of 6.5 million.

So we are in a situation where we have at one end of the scale a number of taxes which contribute tiny amounts of revenue to the state but cause substantial burden on the particular areas they impact—and as I said, again, residential property in particular—and at the other end of the scale the state is heavily reliant on three large taxes whose base is quite narrow. New South Wales under its former Treasurer, now Premier, Dominic Perrottet, at least had a program to look at tax reform. This is something we are not seeing from this government, so the tax burden continues to be borne by a small number of taxpayers paying large amounts of revenue on a small number of taxes while, as I said, at the other end of the scale we have small taxes contributing minimal revenue but having a major impact on the sectors they hit. We see the growth of those taxes obviously being inconsistent across the scale. While the tax base is forecast to increase largely in line with nominal GSP over the forward estimates, some taxes are growing substantially: the growth areas infrastructure charge will grow at more than 30 per cent over the forward estimates; land tax will grow at 23 per cent over the forward estimates; insurance duty, 22 per cent over the estimates; and payroll tax, 21 per cent over the forward estimates—well ahead of nominal economic growth.

So our tax model is broken. The base is narrow, there are lots of small taxes that contribute nothing but do harm to the economy and we have no agenda for reform from this government. So what we see with the tax bill today is welcome in the sense that it is not, for once, increasing taxes in this state, with one exception, but what we are not seeing from this government—what we have not seen after eight years and what we do not see anywhere in the budget papers—is any commitment to reform. The state’s tax base is crying out for reform. We are seeing leadership out of New South Wales; what we need is leadership out of Victoria.

Victoria’s economy is in a very difficult situation, and Mr Davis has spoken about that and we will hear more about that with the debate on appropriation bills later on this week. But our tax take is now higher than it was when this government came to office as a share of the economy. It is higher than other states that we compete with. It is higher than international jurisdictions we compete with. We need to address our tax base. We need to address the way we levy taxes, the breadth of those taxes and the minor taxes we levy, and we need leadership from this government to ensure that we can have that reform that has been missing over the last eight years.

Ms TAYLOR (Southern Metropolitan) (14:33): I would like to pick up some points raised by the opposition, and I note that my learned colleague Ms Watt has already presented some key elements of this bill to this moment in the debate. However, I would like to pick up, firstly, on the issue of the windfall gains tax. I guess something that becomes very apparent in these kinds of debates is the values base and the priorities on either side of the chamber. Sometimes we agree on certain elements; more often than not, I would say, we tend to disagree. That is okay—we have different values, and that is fine.

This is where I am going, if you stay with me, with regard to the issue of the windfall gains tax. It is now to come into effect on 1 July 2023. It will ensure the community receives a fair share of the value generated from government rezoning decisions. Now, there is a further limb to this that is really critical, and that is that it is an important integrity measure that takes sugar off the table and ensures proceeds are returned to the community and we avoid a situation like we saw at Fishermans Bend with the Leader of the Opposition when he was planning minister, when he said, ‘Hey, developers, here we go—bring it on, go hard, knock yourselves out!’. But unfortunately he forgot about that funny little element that makes a community function well: amenity. And what about public schools? Oh, no, do not worry about that. Just send a really strong signal to the developers: ‘Go hard, go hard, go hard. Don’t worry about amenity. Off you go!’.

Hence you can see why there is an imperative to have measures such as the windfall gains tax. There is a good rationale behind it. Instead of quibbling over what it will or will not deliver—and I dare say that we disagree on what it will actually deliver—maybe consider the purposive element, the rationale behind it, which is actually: for the benefit of the community. I am just putting it out there. Again, you can see the difference in the underlying values that drive taxation in this state. I should say that since its introduction, the government, led by the Parliamentary Secretary to the Treasurer, has been consulting widely with industry, ahead of its commencement. So rest assured no-one is concealing this in any way. We are being very up-front with industry and making sure that we take them on the journey.

As has been noted already in the chamber, as part of this process the government has agreed to an up-front exemption from the windfall gains tax on land owned by an Australian university, in certain circumstances. In order for this exemption to apply the university must satisfy the commissioner of state revenue that any revenue derived from the rezoned land will be used to further the university’s charitable purposes, and therefore the proceeds will be reinvested in their educational offerings. And I think that is fair enough. I think we can all understand the rationale behind that.

On one little note I would say to Mr Davis that at a certain point in his speech he was talking down Victoria and saying that perhaps—associated with taxation measures, or whatever; I did not fully understand his point—it might not be so attractive to business. I would just say he should take heed of the former Treasurer, Mr Frydenberg. It did not pay off for him at all, talking down Victoria. So I would take a big step back from doing that, because we have a wonderful state. Do not in any way put down our businesses and the wonderful and productive contributions from our community. I am just putting that out there. I would be very cautious about that. I do not know—we have just had a federal election—but yes, there were some consequences from talking down the state. So maybe they should take heed of that as well.

I go to the point that I think the opposition have made a lot of hoo-ha—it was a lot of hoo-ha, I would say, a lot of hot air—with the accusation of increasing taxes 42 times. Now, I would like to put that to bed. Can I put that to bed. Well, can I say the Andrews Labor government has cut or abolished taxes and fees 57 times since coming to government. So it is important to look at the fine detail, not these big, broad brushstrokes or something that suits a political narrative. Let us drill down. Let us look at the facts, because we are talking about numbers here. I will just repeat that. The Andrews Labor government has cut or abolished taxes and fees 57 times since coming to government. Let us put that on record, a factual statement. Yes, everyone has heard it; I am very happy. This includes increasing the payroll tax free threshold twice since coming to government so that fewer small to medium-sized businesses pay any payroll tax. Who knew?

Mr Gepp: That’s not the case in regional Victoria, is it? Surely not.

Ms TAYLOR: Well, yes—an excellent point that you raise there, Mr Gepp. And last July we cut the regional payroll tax rate to 1.2125 per cent.

Mr Gepp: You’re kidding.

Ms TAYLOR: Yes. Who knew? They do not want to talk about that. They cannot talk about that. That would look like we are actually considering regional Victoria. Who knew? We actually have members in regional Victoria as well.

A member interjected.

Ms TAYLOR: A case in point. Yes. Who knew?

Mr Gepp: I am going to have to raise a point of order if you keep introducing facts into this debate!

Ms TAYLOR: Yes, I am going overboard. The rate is just one-quarter of the metropolitan rate, I should say, to continue that point, and the lowest in the nation. Did you hear that? The lowest in the nation. Gee, that contravenes some points. I say ‘points’ as opposed to ‘facts’, right? Some propositions, I should say, then facts—let us make sure that they are clear on the table as well. It is interventions like this that have seen the regional unemployment rate fall to 3.2 per cent—the lowest in the nation. Who knew? I repeat: the lowest in the nation and less than half what it was when those opposite were voted out of office. Well, okay, I am sorry. Too many facts? No, I am going to keep going. I am going to keep on this theme. It might irritate those opposite that I keep raising facts, but I feel more comfortable in that zone. We supported businesses through the worst of the pandemic with payroll tax cuts, which have saved Victorian businesses about $1.7 billion up to 2021–22 and will save them about $4 billion over the forward estimates—again, more facts. I know it can be irritating, but that is how we roll in our Andrews Labor government; we deal with facts.

There are a few further points that I want to raise with regard to the so-called 42 new or increased taxes. They include the mental health levy, which those opposite now apparently support. But that changes day to day. Today is it ‘We support the levy’ or not? Because they have included that in their 42 new or increased taxes. So I do not know; I am a bit confused. Maybe they support it, maybe they do not.

Mr Gepp: They don’t know.

Ms TAYLOR: They do not know, and tomorrow it could change again. It depends on the media and where they are going and what narrative they want to run. So we will see. I do not know, we could throw the dice. That is probably just as reliable. Anyway, their list counts the foreign absentee landowner surcharges for foreign purchasers six times. Newsflash for those opposite: taxes on foreign purchasers are not taxes on Victorians.

Mr Gepp interjected.

Ms TAYLOR: I know! In fact it is an integral measure to unlock housing supply for Victorians, placing downward pressure on prices and creating a level playing field with foreign developers. That kind of seems like an equitable measure. That would seem like it would work in the best interests of Victorians. I mean, maybe I am confused. No, I think I am right with that. I think I am on it, and I think it is okay. I think we know what we are doing with that, and I think there is a really good, purposive element behind that. So let us continue with that, shall we?

You have got to really call into question this, can I say, dodgy list—I am being cheeky—of 42 so-called new or increased taxes, because when you dig down into it and you see things such as the mental health levy, you have got to question: what does this actually mean? What are their priorities and what do they truly believe? Or are they just flip-flopping day to day? Well, I am thinking there is a lot of flip-flopping, and I do not really know where they are headed. But, true to form, we know that we are solid in our values and that this bill reflects our will to do the right thing by the Victorian community.

Dr BACH (Eastern Metropolitan) (14:43): It is good to rise to also make a contribution on the State Taxation and Treasury Legislation Amendment Bill 2022. I will pick up some of the good points that Ms Taylor made and some good points that Mr Rich-Phillips made in his contribution as well. I am not sure, to be honest, that Mr Rich-Phillips was entirely fair. He talked about the fact that he would have liked to see more reform—indeed tax reduction—through this measure that lies on the table of the house today. Previously I have also spoken about my desire to see a lowering of the tax burden here in Victoria, which has of course increased so significantly over the life of the Andrews Labor government. But, to be fair to the government, that is very difficult indeed when you are in particular so bad at managing major projects.

Ms Taylor spoke about lists. I have a list of blowouts, a list that is not contested in any way, a list that has circulated publicly and in the media for many months and a list that is simply compiled based on what the Andrews Labor government told us major projects would cost and what their own budget papers now say they are costing. We should not be unfair to the Treasurer and to those opposite. It is very difficult to envisage significant reductions in taxation when you have wasted $28.1 billion of Victorian taxpayers hard-earned money on blowouts on major projects. My number, like I say, is not contested by anybody except the Minister for Transport Infrastructure. She returned to Parliament yesterday, which was fantastic, and she was at the Public Accounts and Estimates Committee, where Liberal and National members of that committee asked her some questions. She wanted to take the opportunity to say that $28.1 billion is not the figure. Then she was asked, ‘Is it higher?’. Pointedly, and quite remarkably, she refused to deny that the figure may be even higher than that. Undoubtedly it is, because my list, which is circulated in the media and is not contested in any way by anybody, is a conservative list. For example, the budget papers are silent on the additional blowouts on the North East Link. Every transport expert says that the North East Link has undoubtedly blown out significantly recently, but we do not have that figure yet so I have not added to the total. As soon as I have it, I will add it to the total and to my list. Ms Taylor wanted to talk about lists. We must be fair, I say to my colleagues on this side of the house, in our discussions on this measure.

We will continue to work on this side of the house to make sure that we have prudent measures that we take to the Victorian people in November to lower the tax burden. However, again to pick up some of the points that Ms Taylor made in her contribution, I would love it if we were to be in a position to be far more expansive with the tax reform and tax reduction measures that we are currently feverishly working on. But that will be very difficult. That will be very difficult given that the government has already wasted $28.1 billion of Victorian taxpayers money and very difficult considering other major projects are already blowing out very significantly. For example, we heard yesterday from the Minister for Transport Infrastructure regarding the Suburban Rail Loop. I have not included any information about the extraordinary blowout on the Suburban Rail Loop in my list. That is not included, for the information of the house, in the $28.1 billion figure for blowouts under the Andrews Labor government.

Initially the government said that the Suburban Rail Loop would cost $50 billion. The government has budgeted $34.5 billion for the first third, thus you do not need to be a Rhodes scholar to figure out that that project, even before a shovel had hit the ground or a digger had started to dig up sewers, as one did the other day, had blown out by a minimum of $50 billion, probably $70 billion. Maybe the minister would assert that she will be able to build the second and third thirds of the Suburban Rail Loop for $15 billion when the first third costs $34 billion. If she would like to make that argument, I would invite her to do so.

There has been discussion of flip-flopping. When it comes to the tax bill and opportunities to reform taxation here in Victoria and to lower the burden, I do agree with Ms Taylor: flip-flopping is not helpful. Just nine days before the election Ms Catherine King, then the federal Shadow Minister for Infrastructure, Transport and Regional Development, made a quite extraordinary drop to the Herald Sun. In what was written up in the media as a $4 billion power play, she said that she was going to unlock $4 billion in funding set aside by Mr Frydenberg for infrastructure in Victoria. She said that she would work with the Andrews Labor government, quite correctly, and that if there is a change of government in November, she will work with the coalition parties. At the time I applauded her. In fact on her very first day as minister, that morning, before she was sworn in, I wrote to Ms King to extend the hand of bipartisanship that she had extended to the coalition parties here in Victoria and to commence a dialogue with her. But on her second day as minister, shamefully she ripped away that $4 billion that she had promised in a shoddy attempt, albeit a successful one, to win votes in eastern Melbourne. She promised $4 billion to be unlocked for infrastructure, working with the Andrews Labor government and then with the coalition if we were successful. Then—surprise, surprise—on her second day she tore that away. She broke her promise.

And what have we heard—I would ask through you, Acting President—from the Premier and from the Minister for Transport Infrastructure on this extraordinary ‘flip-flop’, to use Ms Taylor’s expression? Well, not a peep. When Scott Morrison looked sideways he was ‘miserable’ Morrison—‘miserable’ Morrison on infrastructure. Well, it turns out that Ebenezer Albanese is the biggest Scrooge of all. To rip $4 billion in infrastructure funding away from Victoria after having promised it makes the task of tax reform and tax reduction in this state very difficult. I look forward to the advocacy of the Minister for Transport Infrastructure and the Premier to their federal colleagues. I am sure that he did not just pick fights for political gain with the former Morrison government. I am sure he was always sincere and that Minister Allan was always sincere in their advocacy on behalf of Victoria. I have already said publicly that we will continue to fight on this side of the house for our fair share here in Victoria under the Albanese government, who lied to Victorians in a major strategic drop to the Herald Sun nine days before the election. In fact Ms King stated in that article that she knew—

Mr Gepp: On a point of order, Acting President, I understand that taxation and the like can be a free-ranging debate, but I think the member is drawing some pretty long bows in his last couple of minutes in his contribution, which has focused all around the new federal government. I am not even sure if the ink is dry on the paperwork up there yet, but to be blaming them for something that is happening here in Victoria—I think let us give them a couple of months to perhaps stuff things up. But in the meantime can I suggest that the member should come back to the bill before the house rather than this frolic that he is on.

The ACTING PRESIDENT (Mr Melhem): I think one thing that I should say about this issue is it is quite relevant about taxation. Whether it is true or not is a matter for members to justify; it is not for the Chair to determine the truthfulness of comments or numbers.

Dr BACH: Thank you very much, Acting President. And before I conclude, I would not mind taking up the point about values that was made by Ms Taylor.

Mr Gepp interjected.

Dr BACH: Well, it was a good point, Mr Gepp. It was a good point, and Ms Taylor talked about integrity, and to her immense credit she did so with a straight face. She also spoke in her contribution about Mr Frydenberg and was happy to give us some unsolicited political advice, which I take on board in the spirit of cooperation in which it was imparted to us. I would note, given that the debate took that odd turn, that undoubtedly all political parties received a message at the federal election that to so many voters integrity matters. And it should. Integrity should matter for its own sake. I so oftentimes in the past have bemoaned the fact that I have felt that issues of integrity may be big news inside the Spring Street bubble but perhaps do not percolate more broadly in the community. I am talking about the corrupt scheme of the Andrews Labor government to seek to steal the 2014 election, the red shirts scheme. But that did not really harm the Andrews Labor government. But now I think the mood has changed in the community regarding integrity, and that is a great thing.

So to pick up Ms Taylor’s theme, I do think that we have lessons to learn—all of us around this house—regarding the outcomes of the federal election, and my hope certainly is that all those many people in my electorate, for example, where I live in Surrey Hills in the electorate of Kooyong, continue to vote for integrity and in November vote out a crooked government that has raised our taxes so often.

Mr GEPP (Northern Victoria) (14:55): It is with great pleasure that I rise to speak to the State Taxation and Treasury Legislation Amendment Bill 2022. Pleasingly, this bill builds on the Andrews Labor government’s record of implementing a progressive tax system in this state. As was so eloquently put by Ms Taylor earlier in the debate, we have proudly cut or abolished taxes and fees 57 times across the budget—57 times. It is important that we understand and that we underline those numbers, because what we hear opposite on many occasions is something completely different. Ms Taylor, I think, again, very eloquently dismantled Mr Davis’s assertions about new taxes and where they apply. I mean, fancy counting on six occasions a tax that applies to foreign ownership—six times. It does not affect one Victorian, yet this is the sort of stuff that we get built into this debate.

I am very happy if Dr Bach or anybody else on that side of the chamber wants to have a debate about integrity—integrity when it comes to managing the state, integrity when it comes to the taxation system and integrity when it comes to facts around a particular issue that is being debated in this chamber or anywhere else. We are very, very happy to have those debates, because I think the facts speak for themselves that on 57 occasions we have cut or abolished taxes and fees—57 times, on 57 occasions. And it is important that we introduce those facts and that we ensure that people do not twist and turn them and manufacture things for their own political objectives in the debate. So if we want to stray down the path of integrity, I am very happy to have that debate.

Dr Bach: Ms Taylor’s at fault. She strayed; I followed her.

Mr GEPP: No, no. I understand Ms Taylor opened the door, and I understand that the opposition walked through it. I understand you meandered down that pathway. I am just saying let us continue down it—let us hold hands and walk down that path a little bit more—because I am happy to debate integrity. In fact why don’t we turn wacky Wednesday into integrity debating day tomorrow? Let us have a whole day of debating about integrity instead of some of the more colourful and interesting things that we will be dealing with tomorrow that will not have any shred of impact on this state except to say that we can acquit another day in this place.

One of the things that Ms Watt and Ms Taylor both talked about—and I think this is a really important development under this bill—is the motor vehicle duty. I want to commend Mr Barton, who spoke earlier in this debate. He touched on one of the key measures in this bill, which is the introduction of the exemptions for wheelchair-accessible commercial vehicles from motor vehicle duty. I think it is some $3000, and there is a whole range of criteria that spells out exactly what that means for certain categories of vehicles et cetera, depending on the age of the vehicle et cetera, but it is a really, really important feature of this legislation. It should not go unnoticed, and I am sure it will not. But it is a really important progressive change to our taxation. The measure alone will save eligible wheelchair-accessible commercial passenger vehicles thousands of dollars in motor vehicle duty and will help ensure that we have better services provided to wheelchair users particularly, who make more than 1 million commercial passenger vehicle trips per year.

I want to congratulate Mr Barton. Mr Barton said in his contribution that we might not hear about his advocacy every day in this place. I am certain that we probably as a chamber do not hear from Mr Barton every day, but I know from talking to colleagues in government that Mr Barton is talking to somebody in government every single day about these measures. It is through that sort of advocacy that we see these sorts of changes introduced, so congratulations to Mr Barton and to the commercial passenger vehicle owners in terms of this very, very important reform.

Ms Taylor also spoke about the land tax for the specialist disability accommodation dwellings under construction. In building on taxation changes that we have already made to support Victorians with a disability, the bill provides an exemption from land tax for land on which a specialist disability accommodation enrolled dwelling is being constructed. This construction phase exemption will be available for a maximum two tax years and will operate retrospectively from the 2020 land tax year onwards.

An SDA-enrolled dwelling has been specially designed to cater for the needs of people with sensory, intellectual, cognitive or physical impairment, and an SDA resident is someone who is an NDIS participant residing in an SDA-enrolled dwelling and who receives an SDA payment as part of their plan. Although the exemption has been available since the 2020 tax year on land that is occupied or available for occupation as an SDA-enrolled dwelling, that exemption was not extended to land in the construction phase. That was particularly out of step, and that has been addressed.

Ms Taylor also talked about the windfall gains tax exemption for universities, and I will not go into all of those details again. I do want to, however, spend a little bit of time on payroll tax, because in my electorate of Northern Victoria we have had the Leader of the Opposition in particular running around all manner of different places. And we have had the Leader of The Nationals in the other place, the member for Murray Plains, out there in the public arena saying that we have done nothing for regional Victoria since we have been in government. It is simply not true. I talked at the start of my contribution about integrity. Let us be truthful. Let us be truthful in terms of the things that we are out there saying. We now have an unemployment rate in this state, in regional Victoria, with a 3 in front of it. You do not get there by accident. You get there through hard work, you get there through reform and you get there through investment, and that is exactly what we have done. The Minister for Small Business, who is in the chamber, is regularly seen in my electorate making all manner of different announcements—

Ms Pulford: Heading there on Friday.

Mr GEPP: Yes, you are, Minister, heading there on Friday. She is making all manner of announcements but importantly working closely with the small business community. We understand the contribution that small business makes to our economy, and working closely with those people to ensure that they are making the necessary investments to grow our economy in the regional space is so, so important because of the contribution that they make to local employment. We get it. We understand it. We are in there every single day talking and working with small businesses either individually or with their associations, as well as with local councils et cetera, and ensuring that we have got a pipeline of investment, a pipeline of support going to regional Victoria. That is how you get a 3 in front of unemployment in regional Victoria. So it is not true. I have heard the contributions that have been made here today by those opposite about us having left regional Victoria behind. It is rubbish. It is baloney. It is simply not true. It is not a fact. It is a figment of their imagination because it does not suit their narrative. Only a few weeks ago they were out there talking about this great, big campaign platform: ‘We’re going to reform regional roads. We’re going to have this big emphasis on regional roads. Send us a message if your regional road is bad’. And what have they got on the picture? Where was the picture taken? It was a road in Ukraine. They just make it up.

Ms Pulford interjected.

Mr GEPP: They just make it up; that is exactly right. It is the central focus of war on the planet right now, and they use one of its roads as their centrepiece, as their image, as their graphic about regional roads. They will do and say anything in order to fit their political narrative. Be honest. That is all you have to do—just be honest; be factual and be honest.

On payroll tax both Mr Davis and Mr Rich-Phillips tried to compare different aspects of the Victorian economy with other parts of the nation and pointed out—when it suited them—where it is not favourable for the government. Well, what about payroll tax? They stand up in this place time and time again or they run around in regional Victoria, particularly in my electorate of Northern Victoria—they seem to spend a lot of time up there in Northern Victoria, and that is probably because they performed so badly and they neglected it for so long. When they had the chance to do something in Northern Victoria, they did not do anything—they just neglected it. The Leader of the National Party, whose own electorate is in Northern Victoria—what did he do when he was in the last government? He did nothing; he did absolutely nothing. We heard recently that—

Dr Bach: On a point of order, Acting President, previous occupants of the chair have regularly ruled that debates such as this are not opportunities to attack specific members. This has been, as you have said, a wideranging debate. Nonetheless, other members have not taken the opportunity to gratuitously attack other members of this place, so I would humbly submit to you, sir, that perhaps Mr Gepp could come back to the bill instead of attacking members.

The ACTING PRESIDENT (Mr Melhem): Thank you, Dr Bach. Mr Gepp, I am happy to hear you on the point of order. I was about to rule in your favour.

Mr GEPP: Further to the point of order, Acting President, Ms Taylor opened the door to talking about integrity and Dr Bach walked straight through it. I am just pointing out the lack of integrity in the debate around these particular matters out there in the electorate.

The ACTING PRESIDENT (Mr Melhem): I ruled earlier—actually when you were on your feet, Dr Bach, when Mr Gepp raised a point of order—that it is a wideranging debate and everybody has referred to various governments and prime ministers and opposition leaders.

Mr GEPP: Thank you, Acting President. The Leader of the Opposition just a few short weeks ago was up in Mildura holding hands with a fellow member from Northern Victoria, who probably would have needed to set her Navman—either that or I suspect she probably flew up there—and standing there out the front of Mildura hospital, beaming. ‘We will do this if we are elected’, they said. ‘We commit three quarters of a billion dollars to rebuild the Mildura hospital’. Do you think the local people up there have forgotten who privatised the thing in the first place, who sucked all of the money they could out of that place and sent services to the floor? It was the Liberals and Nationals. So if you want integrity in a debate, at least have a small whiff of integrity on your own side.

When it comes to payroll tax, we now have the lowest payroll tax in this country for regional Victoria—1.2125 per cent. It is a quarter of the metropolitan rate, it is the lowest in the nation and it underscores that this government is absolutely committed to regional Victoria. It is absolutely committed to northern Victoria in my electorate. We work hard every single day with businesses and with local communities to deliver quality projects, quality investment and growth in employment while reducing taxes, reducing fees and ensuring that livability standards are going north, not south. We are proud of that. I am proud of this bill. It is a very good bill. I commend the Treasurer, and I commend this bill to the house.

Mr QUILTY (Northern Victoria) (15:10): I will be brief. This bill is the government’s yearly tax bill. This year the bill is going to do very little. An astute observer would suspect that the bill is deliberately inoffensive because it is an election year. It is a way of playing the budget with a dead bat. Governments prefer to sneak in tax increases in the early years of their term and then ease off in an election year. The effect is still like a ratchet, because taxes never decrease by as much as they increase. Victorian government spending has risen by more than 30 per cent from pre-COVID levels, and it is expected to increase in this budget. After years of a COVID nightmare and a shut-down economy this government is planning on maintaining its record spending, its record costs and expenses and its record taxes. What Victorians need is relief. They need a chance to breathe, to rebuild their savings, their businesses, their investments and their lives. We need significant tax cuts right now. We need cuts to payroll tax and stamp duty, and to get tax cuts we need cuts to expenditure. We need to end the tax on jobs to return those wages to working Australians and to revive business.

Housing in Victoria is a sinking ship, but all the government is talking about is how it is going to get more people onto the ship and how it needs more cash to fund the lifeboats. This is going to end in tears and in bailouts. The budget stamp duty revenue projections are built around constantly rising house prices; the government has an incentive not to solve our housing crisis. What we need to do is build more dwellings, enough so that the price of housing starts to fall, not to rise. We need to build 1 million extra new dwellings in Victoria over the next 10 years. We need to, as Ms Taylor would say, bring it on. We need to increase supply. Nothing else will work. We need to right this ship. We need to cut stamp duty, reduce the regulatory burden and allow more housing to be built. We need to throw the government overboard and let the ship right itself. The Liberal Democrats believe in tax cuts for working Victorians, and this bill does not do that.

Ms BATH (Eastern Victoria) (15:12): I am pleased to rise this afternoon to make a brief contribution on the State Taxation and Treasury Legislation Amendment Bill 2022, and I have to say that I have sat in the chamber and very much enjoyed the cut and thrust of various members of Parliament making their 40-love and deuce contributions. I would like to first of all pick up the contributions of Ms Taylor and Mr Gepp in their very excited, chest-pumping position on the rate of unemployment in regional Victoria. It feels like we have got the cone of silence here and the sole reason that that is at that point is Daniel Andrews and his troops. It had nothing to do with, during a very challenging time, a sturdy and stable federal government that invested in regional Victoria and kept the lights on and payments flowing.

To that point, in preparing for the debate on the Appropriation (2022–2023) Bill 2022, which is coming up later this week, the budget bill, I read the Treasurer’s, the Honourable Tim Pallas’s, speech on his appropriation bill, and he was spruiking the 4 per cent unemployment rate across the nation and 3.2 per cent in regional Victoria. Let me just contrast that, if we are interested in the facts, with one beloved area in my Eastern Victoria Region, and that happens to be the municipality of Latrobe city. Its current, as of December last year, which is the last labour force research from the Australian Bureau of Statistics, unemployment rate is at 7.8 per cent. If you think about averages, that must mean that there are certain areas in regional Victoria that have an even lower unemployment rate than 3.2 per cent in order for it to be that way. I am reflecting on the massive excitement and patting on the back here today that ‘We care about regional Victoria’. Indeed I am told by bemused National members in the lower house that just about every minister that got up to make a ministers statement today spoke on regional Victoria, because I think they must have been a bit spooked by the fact that the budget was so neglectful of regional Victoria.

Getting back to Latrobe City Council, it is a wonderful area. My office is there, and I spend a lot of my time there. I am very proud that it is a place that has kept the lights on in this place, our hospitals going, schools running and the trams going down the tram tracks for 100 years. For people to belittle it and call it all sorts of names—I am not saying anyone has done that today—is absolutely appalling. This area is going through transformation and transition. It is going to happen whether people like it or not, but it needs to be forward planned. The government has spruiked how wonderful it is. The Latrobe Valley Authority has had six years and approximately $292 million, and only now a government report—I call it a government report because it was back-ended by government members—says how wonderfully it is doing and that there are no problems, ‘Nothing to see here’. Well, six years, no plan and a current budget of $7.5 million, and of that $7.5 million for the Latrobe Valley Authority, $5 million of it is for wages for 32 employees and $2.5 million of it is for—what? It is for programs. Indeed one of the parts of the report—recommendation 8—actually says that the Latrobe Valley Authority should be looking at more promotion of what it does—not programs, not plans, but more promotion.

In going back to this area of the bill, I also reflect on what is the value of a promise by a Premier:

I make that promise, Peter, to every single Victorian …

he said back on election eve 2014. He was asked:

… do you promise Victorians here tonight that you will not increase taxes or introduce any new taxes?

He said:

I make that promise, Peter, to every single Victorian.

We are the highest taxed state in Australia, and yes, there have been 40-plus taxes, and around 20 of them have been on property—taxes or increased taxes under Daniel Andrews. We, The Nationals and the Liberals, have a different view on taxation. We know that we need to tax. You have got to have tax in order to pay and keep the lights on and fund various services throughout the state.

Dr Bach: But debt?

Ms BATH: And debt—what is the debt on the blowout bill? What is the debt now? Is it somewhere around $3 billion a year? Is that what it is going to extend to? Thank you, Dr Bach, and I take your point about debt. We are having to service these debts as well.

One of the things that the Andrews government should be looking at in this area is efficiencies. We saw somewhere in the paper the other day that we do not want any more career politicians. Well, I do not know about you, Dr Bach, but I was a teacher and a small business person before I came in here. I think you were the principal of a school. That is a real life to be had. Leaving aside other pathways, if you look at efficiencies and the need for efficiencies, there are some amazing blowouts that we see from the government. I happen to have some information, again, that I do not think is disputed. The Latrobe Valley GovHub was promised $3 million. Well, in the budget of 2021–22 it was budgeted at $8.8 million. That is almost a $6 million blowout. Who lives there? At the moment Solar Victoria lives there. It is a reasonable place to put staff—government employees. We hope to grow, certainly, renewables right across regional Victoria in a very sensible and measured way. But those ads for Solar Victoria say staff could actually live in Melbourne or in the valley. You could work in Melbourne and live in Melbourne or you could work in the valley. So we have got budget blowouts—that is, not efficiencies—and we have also got, apparently, staff who live in Melbourne even though they should be living in regional Victoria.

There are various other elements of the bill I just want to cover off on. It does certainly cover off and amend a number of acts. In one way we have seen the growth of the 40-odd taxes and increased taxes over the last eight years. Well, it has now come around to election year, so the government is putting in a little sweetener. It is amending the Borrowing and Investment Powers Act 1987, the Duties Act 2000, the Essential Services Commission Act 2001, the Land Tax Act 2005, the Payroll Tax Act 2007, the Taxation Administration Act 1997 and the Windfall Gains Tax and State Taxation and Other Acts Further Amendment Act 2021.

We are certainly not going to oppose the bill, but we certainly have concerns around clause 34, which relates to the discretion of the commissioner of state revenue to be able to put a time limit of five years on whether or not he or she will accept any objection to a tax ruling. The concerns we have in relation to that include that there can be legitimate cases, such as complex wills or prolonged illnesses, where taxpayers may otherwise be able to convince the commissioner to review their situation past five years.

Another thing that I reflect on in speaking on this bill today is the windfall gains tax. I spoke to that in this house some few months ago and about the taxable uplift. It was very strongly opposed by the Property Council of Australia, the Housing Industry Association and the Master Builders Association of Victoria. They felt that this was going to be a huge detriment to the affordability and supply of houses in Victoria when we can least afford to have another burden, and that goes double—it is acute—for regional Victoria.

We have seen total taxation go up by $12.4 billion since the government came to power—an almost 70 per cent increase—and, as my colleague Dr Bach said in his contribution around waste, $28 billion of blowouts on infrastructure. What could that have been spent on in that time? We could have fixed the healthcare system; we could have triaged and brought back to life the 000 system; we could have built various entities and places and important infrastructure in my Eastern Victoria Region; and we could have saved stress, lives and businesses. We will certainly not be opposing this bill. I hope the government is sensible and takes out clause 34.

Ms TIERNEY (Western Victoria—Minister for Training and Skills, Minister for Higher Education) (15:23): I move:

That debate be adjourned until later this day.

Motion agreed to and debate adjourned until later this day.